In today’s briefing:
- Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer
- [Japan M&A/Activism] SOFT99 MBO Sees Activist EffissimoOverbid by 66%! Will This Set New Precedent?
- Hitachi Ltd. (6501 JP): Short and Long Term Benefit from New U.S. Investments
- ENEOS Holdings (TSE: 5020): Cash Returns Support, Valuation Capped
- JSW: Backlog 2× Sales, Nuclear Edge Drives Upside
- Q3 Follow-Up – LIFULL (2120 JP): September 2, 2025
Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer
- On 12 September, Kyodo News reported that Effissimo Capital Management will launch a competing tender offer for Soft99 Corp (4464 JP) at JPY4,100, 66.3% higher than the JPY2,465 MBO offer.
- The Effissimo offer structure has been designed to shine an unflattering spotlight on the MBO low-ball offer and to prevent management from privatising Soft99.
- The management has several options to respond. The initial play will likely be to lean on the special committee to question the feasibility of the Effissimo bid.
[Japan M&A/Activism] SOFT99 MBO Sees Activist EffissimoOverbid by 66%! Will This Set New Precedent?
- In early August, the founder-family announced they would MBO the car care company Soft99 Corp (4464 JP). It was a very cheap MBO. Even 20% higher it would be cheap.
- On Saturday, Kyodo, followed by various other media outlets, announced activist Effissimo Capital Management had announced a TOB to buy the company saying the MBO was “an extremely low level.”
- The Nikkei-reported goal would be “to protect the interests of minority shareholders while ensuring medium- to long-term increases in corporate value.” This is REALLY BIG NEWS.
Hitachi Ltd. (6501 JP): Short and Long Term Benefit from New U.S. Investments
- More than $1 billion to be invested in electric power equipment and railway car production, plus a new automation center, to counter tariffs and support long-term expansion in the U.S.
- The rising share of sales accounted for by smart factory and other digital technologies should lead to higher profit margins and ROIC over the next several years.
- The share price has dropped 13% from its recent high to 26x EPS guidance for FY Mar-26. Buy on weakness for long-term growth. The main risk is a slowing economy.
ENEOS Holdings (TSE: 5020): Cash Returns Support, Valuation Capped
- Business: Japan’s largest integrated energy group, ENEOS runs ~45% of national refining capacity, upstream assets, power generation, and holds 42% of JX Advanced Metals.
- Earnings (3Y): OP peaked at ¥504 bn in FY2023 on high oil prices, fell to ¥107 bn in FY2024 on inventory losses, and is guided to ¥300 bn in FY2025.
- Valuation & Risks: Trades at ~8× EV/EBITDA (~¥900/share), above our SOTP fair value (~¥690); key risks include crude volatility, shrinking domestic fuel demand, high leverage, and transition execution.
JSW: Backlog 2× Sales, Nuclear Edge Drives Upside
- Macro: Nuclear restarts (Tomari-3, Aug-25) and record defense budgets underpin demand for JSW’s forgings.
- Results: Q1 FY25 showed solid YoY growth (revenue +7%, OP +21%) with margins lifted by defense/nuclear.
- Valuation/Risks: Shares trade at ~26× P/E on a ¥508 bn backlog; upside rests on execution, with delays the key risk.
Q3 Follow-Up – LIFULL (2120 JP): September 2, 2025
- In Q3 FY2025/9, LIFULL Co., Ltd. (hereafter, the Company) reported consolidated net sales of JPY 21,059 mn, up 7.1% YoY and operating profit of JPY 3,001 mn, up 23.3% YoY .
- Operating profit rose substantially, backed by strong performance in the HOME’S Services segment.
- Excluding the one-time gain on sale recorded in the same period a year earlier, operating profit doubled on an actual basis, underscoring a notable improvement in profitability.
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